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BRDO Expert: Decentralization reform can be catalyst for fundamental changes on construction market

Creating more than 1,500 territorial communities according to results of the decentralization reform can radically change the rules on the construction and development market in Ukraine. This conclusion was made by experts during the discussion “Decentralization: investments and development” organized by the Ukrainian Building Community on April 5 in Kyiv. The head of the construction sector of the Better Regulation Delivery Office (BRDO) Olena Shulyak attended the event.  

The Deputy Head of Kyiv City State Administration Oleksiy Reznikov, the director of the Land Resource Department of Kyiv City State Administration Oleksiy Polischuk, the Director General of the Kyiv Investment Agency Oleh Mystyuk along with business, public and expert community representatives analyzed current issues of attracting investments the local authorities face with when implementing the decentralization law and increasing their importance.

Participants of the discussion pointed out a lack of development strategies and inventory / certification of property of settlements, biased planning and a lack of qualified personnel among main problems faced by territorial communities according to results of the decentralization reform. A separated set of questions was devoted to land management issues with strengthening the role of territorial communities. All questions raised during the discussion directly influence on the progress of construction and development sectors.

“The ideology of the decentralization reform involves transferring many functions from the center to territorial communities. Enhancing the role of local authorities in the management of community property and land, increasing tax revenues and obtaining regulatory powers at the regional level can be a catalyst for fundamental changes on the construction market. Such changes require much more professional skills and deep knowledge in economics, finance and strategic management as well as the understanding of investment management from local leaders,” Olena Shulyak said.

Despite the opportunities that decentralization provides for investment projects, it is needed to create a clear mechanism for harmonization of regulatory initiatives on local and national levels. Changes in procedures and a list of specific tasks that local authorities should take into account will, first of all, contribute in creating a favorable investment climate at the local level.

According to the head of the BRDO construction sector Olena Shulyak, the problem of clear and transparent communications of local authorities and the community also requires the attention:

“I can say that a perfect example of the incompetent communication policy and a lack of understanding of possible effects coming due to a lack of interaction with society is no competition for a position of head of the State Inspection of Architecture and Construction Control in Kiev. Local authorities should listen to the community and not repeat old mistakes. I’m sure that an investor will actively invest in the development of those settlements, where the authorities take into account the position of society and business.”

It should be noted that according to results of the decentralization reform in Ukraine, it is expected that a large part of regulatory functions in the field of construction will be transferred. In particular, all territorial communities will get the functions of state architecture and construction control that provide for granting permits for construction, control over construction facilities and putting them into service.